Greenfield developments often use reclassified agricultural land.
The reclassification of agricultural land to allow building (or any non-agricultural use) is taken by the relevant land protection authority, and involves the land being marked as 'other areas' in the land registry records.
However, this does not automatically mean that the land will remain building land for ever or that any building plan can be carried out on it. Every reclassification decision applies only to the project documents and zoning decision submitted as part of the application.
Reclassification decisions are valid for five years, even though they are called 'permanent' exclusions: the reclassification only becomes permanent if the approved plan is actually carried out on the land within that period. If this does not happen, the decision will expire and the land will be classified as agricultural land once again.
This can cause problems, especially where investors are unable to raise enough funds to complete the building project. If a new investor wants to step in and carry out its own building project on the land, it would have to start again and obtain a new decision to reclassify the land for non-agricultural use, based on new project documents and a new zoning decision. Sensible budgeting is therefore an essential process for all greenfield project investors.
Any greenfield building project that has not complied with the proper procedures would amount to an unlawful occupation of agricultural land. This would mean the investor would not only have to pay high charges to get the land reclassified for building but would also have to pay even more in penalties.
This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq
Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.
The original publication date for this article was 12/04/2012.